A LONDON court on Monday
(4) convicted three former Barclays
bank employees for manipulating
a key interest rate
in the third trial over the Libor
rigging scandal.
Jay Merchant, Jonathan
Mathew and Alex Pabon were
found guilty at London’s Southwark
Crown Court of rigging
Libor, the benchmark interbank
lending rate and a key
reference for financial products
globally, between June 1, 2005
and August 31, 2007.
Another banker, Peter Johnson,
had already pleaded guilty
and all four will be sentenced
on Thursday (7).
“Whilst employed by Barclays,
the convicted defendants
conspired with each other and
other individuals…intending to
prejudice the economic interests
of others,” the Serious
Fraud Office (SFO) said in a
statement.
Two former colleagues of the
convicted bankers, Stylianos
Contogoulas and Ryan Reich,
also stood trial but the jury was
unable to reach a verdict in
their cases. The SFO has 14 days
to consider whether to ask for
a retrial.
US/British citizen Merchant
45, was convicted unanimously,
while Briton Mathew, 35, and
American Alex Pabon, 38, were
found guilty by a majority decision.
The two men told the
court their actions were sanctioned
by bosses.
“The trial in this country of
American nationals also demonstrates
the extent to which
the response to Libor manipulation
has been international
and the subject of extensive cooperation
between US and UK
authorities,” said SFO director
David Green.
Libor, or London Interbank
Offered Rate, is a global benchmark
that is calculated daily,
using estimates from banks of
their own interbank rates.
It underpins the terms of
$500 trillion of contracts from
mortgages to the cost of corporate
lending.
The men were accused of
submitting unrealistic figures
during the height of the 2008
financial crisis, boosting their
earnings at the expense of their
counterparts.
The scandal erupted in 2012
when Barclays was fined £290
million by British and US regulators
for attempted manipulation
of Libor and Euribor interbank
rates between 2005 and
2009. Euribor is the eurozone
equivalent of Libor.
Royal Bank of Scotland, Swiss
lender UBS, Rabobank and broker
Icap have also received
heavy fines over the scandal.
This was the third British trial
over the scandal.
Tom Hayes, a banker who
worked for UBS and Citigroup,
was last year sentenced to 14
years in prison, reduced to 11
years on appeal.
A second trial resulted in the
acquittal of six city workers earlier
this year.
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